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Power Lunch

News/Business. Sue Herera, Tyler Mathisen. Today's news on the economy, markets, real estate, media and technology. New. (CC)

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01:00:00

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Us 16, Europe 9, Sony 6, Washington 5, Chicago 5, Bob Pisani 4, Ntsb 4, New York 4, U.s. 4, Logitech 3, Bob 3, Mandy 3, Amr 3, Tyler 3, United States 3, Boeing 3, America 3, Einhorn 3, Boston 3, Steve 3,
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  CNBC    Power Lunch    News/Business. Sue Herera, Tyler Mathisen. Today's news on  
   the economy, markets, real estate, media and technology....  

    February 7, 2013
    1:00 - 2:00pm EST  

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sequester mean specifically for markets and rally we had. kenny is here with us. kenny, in your morning note you said, listen, we knew the deal. we know the deal that's been out there for some time. >> legislature putting the deal together a year and a half ago. they didn't expect, honestly, they didn't expect to be here, that it would have been dealt with. but that is it. and this is what it is. is it a terrible piece of lenlts lags? absolutely. but it will force compliance unless we kick the can down the road again, which i think is what the market really tells you. er with stuck in the 1490, 1510 range. we either need to break lower o or higher to move. >> it is forcing a discussion, and that's what i like about it. >> okay. >> don't you sense a new sense of realism among congress. a little bit. don't you sense a potential -- >> the president said it the other day when he came out. he realizes it won't again done. now he is looking for more short
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term fixes as they kick the can down the road. >> and that's what the mark set expecting. further moves down the road rather than -- >> a deal. right. you won't get the big deal. >> i don't think you will get that grand bargain, bob. >> we may get some kind of deal that avoid the worst consequence he of the sequester. i think that likely to happen. >> always the eternal optimist. >> ty, back to you. >> sue, thank you very much. shop until you drop. at least for the month of january. big name retailers reporting strong january sales after offering new merchandise. this despite consumers taking a hit to take home pay to higher payroll taxes which is part of the fiscal cliff resolution. courtney reagan here on the retail beat. hi, courtney. welcome back from dallas. >> january an interesting month. it is promotional. make way for full price spring merchandise. but that means many goods sold are sold at rock bottom prices that replaces it. of the 18 drugstore retailers,
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thompson reuters has a gain of 5.8%, year over year. far surpassing expectations of 3.5%, thanks for a demand of winter apparel. the biggest perform group by far with comps up 11.4%. discount retailers turning in the lowest comps for the month. jc penney increasing by 11.7%. sales are driven by quote fresh fashion which would suggest nonclearance sales. but the retailer up guidance, only slightly. for specialty, 8% increase in comes doubles expectations and limiting more than double on wall street chain sales. despite the big comps, limited says it's comfortable with earnings consensus and gap remains just slightly ahead of wall street estimates. disappointing, shares are selling off. >> gap has had a little run. >> gap is doing considerably better. it is a surprise but it has
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stayed that way for a long time. it's been a nice trend. >> courtney, thank you. apple the big stock story of the day. david einhorn on squawk box defending his decision to sue the tech giant over its plan to eliminate preferred stock. green light capital's founder seeing green light needs to find way to distribute the cash it hold to shareholders. >> people who have gone through traumas, they sometimes -- and apple has gone through a couple traumas in its history. they can sometimes feel like they can never have enough cash. i remember my grandma, a depression era woman from her childhood, and she wouldn't even leave me a message on my answering machine so i could call her back because she didn't want to get charged for the phone call. >> there you go. let's take a look at shares of apple right now. up about $3.70 at 458.40.
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stock down 14% so far this year. so what is the best way for apple to unlock shareholder value? funny we should talk with about this because this is a company who probably created more shareholder than any other company or country. travis mccourt is managing director at raymond james. what would you recommend the company do to unlock value? >> well, i mean, look, apple took a big step forward last year and they will be paying out the vast majority of their u.s. free cash flow this year in the form of dividends to the common shareholders and buy backs. look, i think the preferred stock idea is is a really interesting idea. i haven't seen other companies use it, but this may be interesting for a lot of other companies sitting in a lot of ksh and preferred shareholders value dividend much higher than common shareholders, it kind of makes sense.
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>> why do you think, tavis, that apple sits on so much cash. it is a derivative of a very strong business but they can't be earning much money on that cash. they sit on it. they are not doing a lot of deals. >> look, the bigger issue is u.s. tax policy. 68% of that cash is sitting overseas and to bring that back and give it back to shareholders, requires them not only to pay a tax but also very likely requires tlem to restate their income tax rates in terms of gap accounting which lowers their earnings. so this is not an apple specific issue. it is across the tech industry broadly. and if somebody can can figure out how to unlock the value of that international cash, a lot of these stocks are going up. >> i won't ask you to speak for mr. einhorn but i believe he characterized a permanent preferred stock as win/win. i guess that means for the shareholders and company. can you explain to me how this would be a win/win for the company?
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>> i mean, look, i think it depend on how you define. company. i think mr. einhorn is right, the cash on the balance sheet is the shareholder's cash. if they can get a higher multiple for that cash, for cash paid out with the preferred than with the common, then mathematically it will create value. whether that ends up happening or not, i don't know. i can't think of another instance where a company has done this so it is hard to draw on a historical context. >> thank you for your answers. sue? >> there is more consolidation in the airline industry coming. it would create the largest airline and they are hoping it could wo happen in the next two weeks. us airways is currently trading up 34 cents but that's equivalent to 2 1/3. over to you, phil.
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>> that stock has been moving higher over the last year. today it is up on the news that we reported this morning and others have reported early today as well that we are close to seeing a merger between amr and us airways. remember amr in bankruptcy court. they would like to gelt there deal done in bankruptcy court. that expires next week. that could be extended. we wouldn't see a deal for almost two more weeks. all stock deal $10 billion. boards need to approve. doug parker, current ceo is the ceo of the merged airline. when it brings up the question, ceo of amr, he is likely to get the role of nonexecutive chairman. perhaps executive chairman though he was told he would not like to have a lot of power in an emerged airline. this would create the world's largest airline, larger than united continental. already approving terms of essentially bringing unions
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together. that is a key factor in getting this done over the last six months. and one more time as you look at shares of us airways over the last year, wh a nice move this has had and comment on wall street today, sue, saying this is good. the airline needs to continue and that's why shares are moving higher. >> indeed. investors certainly like it. phil within there was an ntsb news conference this morning. what are the latest we know about the 787 dreamliner? >> they are making progress. they found where the fire started in the lithium ion battery. it was cell number 6. there was short circuiting in the cell. what they have yet to determine, and in is important, they have not found what caused the short circuit. they are making progress. while that was taking place, the briefing in washington, this dreamliner flew from ft. worth on its way it everett, washington. this is a ferrying flight. an test flight. moving it from where it was being painted in fort worth back to the seattle area.
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it'll be landing in about a half an hour. take a look at shares of boeing real quick, sue. this is interesting. when the ntsb began the press conference, see the spike there, people thinking perhaps the ntsb would say, we found the root cause. then they sold off when they did not. that dreamliner landing in the seattle area in about an hour. sue? >> we will show everyone the picture live when it does lap. steve liesman is exclusive with one of the biggest doves, charms efians. wen't to extend our easy money policy. how much longer may surprise you. plus, northeast bracing for that major snowstorm. we will have the latest track on the storm with the predictions of the snow amounts as you see right there when we come back. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.
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welcome back to "power lunch." i'm josh lipton. look at snap-on. before reversing lower, the company makes tools for professionals in the auto and aerospace industry. fourth quarter earnings were up 14%. but europe remains a concern, says one analyst. about 20 to 25% of sales for snap-on are in europe. the stock right now down about 4%. sue, back to you. >> josh, thank you. well, the debate over qe3 continues in another cnbc exclusive. chicago fed president charlie evans telling steve liesman that
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the fed may need to keep up purchases of bonds for maybe as long as another year. steve is live in chicago. 's got more on that. steve? >> thanks very much. we sat down exclusively with chicago fed president charles evans. he is the man who's done more than anyone else bring about the fed quality for the ease of hitting economic targets, specifically the unemployment rate. he said it is working, in his opinion. and he citing the rerival of the housing sector and the fed will be doing qe for quite sometime. how long? well, we asked him, how long until the unemployment rate comes down and shows what he calls substantial improvement? >> the investment climate seems to be one where people are increasingly understanding that very low interest rates on super safe assets are going to be around for a while. and if they are worried about that, they need to take on more risk and taking on more risk will help get the 50e con my
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growing. >> in another part of the intertrue we ask charlie evans about reports regarding hacking into the federal reserve's website. and he explains that he had just recently been briefed on it, but here is the information that he knows. >> on the public website, we had emergency communication with bankers, in the case of a weather event, hurricane or something. and bankers need to understand how they can get cash and plan. they need to come to a public website. this isn't an internal operational website. the kind of thing that i have to log into. i have multiple authentication keys. it is a different situation and it didn't impair any of our ability. >> evans says as far as he knows the operational part of the fed's website was never in danger. we will follow how much of the concept of economic targets is adapted by other century banks around the world. but for right now, it is policy at the federal reserve and we will be watching the change of the unemployment rate for a change in fed policy.
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can you see the entire interview on-line at cnbc.com. back to you guys. >> thank you very much, steve. meanwhile, 21-year-old bangladesh man pleaded guilty for trying to blow up the federal bank in new york. he was charged after a government sting operation in october. ty? >> sue, the mark set taking a big hit today but one newspaper stock is flying high. consumer electronics giant sony getting creamed after posting another loss. iscompany's turn around plan working or not? as you see sony moving lower. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it.
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read and consider it carefully before investing. risk includes possible loss of principal. down 94. were in triple digits earlier. it is february. what does this expect? it is snow and two storms are heading towards the northeast. they may merge and become a doozy beginning friday afternoon. weather channel's paul goodloe is tracking it for us. hi, paul. >> hi, how you doing? you talked about those storms merging. and they will bring the biggest dump of snow we've seen in a year and a half. new york city start with rain as we have two systems. one, a clipper across the midwest bringing detroit and
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michigan some snow but also the southern snow giving south some rain. they will come together an form a new storm, a nor'easter off-shore. as they do so we will plenty of wind, rain and snow and both storms mean business. let's put this in motion by friday evening. plenty of wind and rain and some wind gusts, 40, 50 miles per hour and some models that say these could be stronger than that. it is not just friday and friday night. new york city might start with rain. but crashing over hard to snow and the snow does not stop until sometime saturday for you. and this is slowing down into sunday. so saturday and sunday of additional snow. especially for new england. the bull's eye is here, so people are out of it. say philly, d.c. were you're out of this system in terms of heavy snow where the bull's eye is is the boston area. if we get behind the low side, that might be a foot of snow in boston. worst case scenario, perhaps three times that amount in the
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areas in and north and west of boston. new york city, the burling of your snow falling later in the day friday, into saturday. new york saturday, maybe six to 12, up toity rochester rock in putnam. maybe a foot or more. again, if the storm slows down, late saturday into sunday, looking at perhaps the largest dump of snow across the region. perhaps since october of 2011, it's been a while. but again winter of 2013, name some business with this storm. sue? >> yikes! and i thought that groundhog saw his shadow and we would have an early spring. guess not. thanks, paul. appreciate it very much. we should go to chicago because the weather will be much better there than it is here. hi, ricky. >> hi. i feel bad for you, sue. we've had very little snow in chicago this season and a lot less selling of traesh ris of late. look at the chart of ten-year. you can see we are now well
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under the 195. many traders calling it a pivot. why, ask you? this should explain. we are hovering at two-week lows and the pattern looks like more buying in treasury. not necessarily selling but equities figure and as do currencies, look at a year to date chart of the euro currency. can you see at one point at 136 1/2 op closing basis now. we are well under 134. euro versus yen at one point above 127. now barely above 125. usda report out, there's talk of five decade low global stockpiles of so i beans. there's the chart. you saw how aggressive it was in the summer. we want it pay attention to carry out and issues in brazil regarding soy beans. sue, back to you. >> actually, i will pick up, rick. other big stories we are following. yahoo! and google joining forces. on the earnings front, another loss for sony. but new york times, better than
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expected. julia boorstin, let's start with google with a history, these are strange bed fellows, aren't they? >> i would say it is a deal with a with a frenamy. tweeting out to followers, she thinks this is a great deal for yahoo! >> what are they doing? >> users are not going to in the any difference. if you use yahoo! or not their various sites, you won't notice a difference. but it is a change to the back end. google will supply some of the ads or yahoo!'s ad inventory. google has such a broad range and a huge ad would net work that they should be able to deliver more targeted, more relevant ads for users, which means they should make more money. >> good for yahoo!. let's move to "the new york times." from old media to new media. >> that's right. digital subscriptions are on the
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rise. 13% more digital subscriptions than the prior quarter. from q3 to q4, a big jump. there was a political season. a lot of great digital coverage of a snow fall thing. i don't know if you saw the snow fall session. but knocking digital out of the pa park. this this is first time that subscription revenue is bigger than advertising revenue. it is showing that they are reinventing the model. you have google and yahoo! teaming up to sell ads there. >> sony, disappointing, is the turn around working? >> not fast enough. think about it. remember the walkman? >> sony could have been apple. >> sony could have been apple, and it wasn't. they are trailing. their tv performance is disappointing. tv division has been in the red. they are trying to invest and innovate, but it is not happening fast enough. handheld devices and televisions have been lagging. what is interesting is they have a big announcement coming up on february 20th opinion we expect
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that to be about a new play station, that would be great. in the meanwhile, they are warning their handheld gaming devices are not moving fast enough. because if you can play games on your ipad, your iphone, you don't need a separate gaming device. >> my 7-year-old son would not agree with that. he loves his ps -- he would not agree with that. >> neither would my son. thanks, ty. we go cross country with the powerhouse taking a look at one of the top 20 housing markets. and we will show you where the wall streeters these days are looking to relocate. you will not believe the price tag on some of these homes. then, it's do or die time for logitech ceo. he will talk about how he plans to save his company from the death spiral.
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welcome back to "power lunch." i'm susan epperson. it has been a very choppy trading session and we see gold fuelling the euro at times.
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at times, gold going against where stocks were but traders say it has been very choppy and without a settlement above the 1682 level, there's not that much bullish sentiment right now in the marketplace. we are continuing to watch though what is coming out of europe. listening to draghi's comments and the extension of qe3 into next year. that is seen as somewhat bullish. also in the metals market, platinum and palladium are the winners for this year and today they are taking a bit of a breather. we are seeing red across the metals complex. >> thank you very much, sharon. down here at the stock exchange, we have come off the levels of the trading session. off about 80 points right now. we will get more on the trading action. bob pisani is with me. >> all of the damage is done in the first 30 minutes or so. like everybody came in and decided to sell off. the important thing today, well, it's been side ways ever since.
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in fact we have been moving up since a little afternoon. and my thing is a little bit of topeeness. we have been side ways since january but europe has not. europe las been on the decline since january. this is the vanguard european. this is a broad etf and you can see since the end of january we have been on the decline. other groups are topee too. eem is the largest of the etfs. you can joan south africa, china, brazil. that been declining the last several days. how about home building stocks? there is itb. home building stocks topped up at the end of january. historic highs and have been moving down ever since. here is a u.s. stock to watch. amazon. amazon hit an historic high. that was at the end of january and i don't remember, i think 284. and ever since then, it just has
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had no energy at all and we are sitting near several week lows here on amazon. i'm not saying it is a problem but it is looking topee. >> certainly. yeah. thank you, bob. see you later. >> let's go uptown and head to the nasdaq. seema mody is following big movers over there. >> apple shares bucking the downward trend and equities. we are seeing the stock up about .1%. einhorn of greenlight capital saying apple should use its cash. speaking of allocations strategy, apple outperforming the average dividend yield on the s&p 500. according to wisdom tree, apple needs to increase dividend by 5% to become the largest dividend payer in the united states. let's move on to blackberry. shares approaching 52-week after after thumb's up at w fargo. lastly another space to track, indian tech. those stocks in focus. two things, first indian's outlook for the year below street expectations.
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that is putting pressure on adrs but cognizant tech, with an up tick in demand from european client. interesting. tyler, back to you. >> thank you. how do you stay relevant in a fast changing world moving from pcs and tablets -- from pcs to tablets and mobile devices and on. here is what cnbc was told yesterday about that. >> the market that hp serves changed dramatically because the pc business is now a shrinking business, an growing business. dell going private, creating new opportunities. >> the pc squeeze and move to mobile is a challenge facing logitech. billions of mice they've made. ce so calling the situation do or die for his company. welcome to "power lunch." er with very flattered you would choose to spend your birthday here with us. we don't have cake for you.
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not even lunch on "power lunch." but you are welcome to be here anyway. you just started with this company and you as you say, it is a pivotal time for the company. you started january 1. >> that's right. >> what is different? what surprised you? >> i just took over january 1. what surprised me is how powerful the capability is in our whole technical space. we have such technological advantage there. the real issue for us is we have to move that technological advantage from being just about pc peripherals to pc peripherals and mobile peripherals, like tablets. >> i want to show people, maybe can you do it, it is a cover for an ipad mini that doubles as a keyboard. >> it is. and we love -- >> these kind of things are the future of your company. >> absolutely. we love this. we call this is the other half of the ipad. as can you see, it looks like the other half on the outside. magnetically attached to the back. comes apart.
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>> it is quite a full size keyboard. these keys are not mini. >> not at all. you will be shocked. >> not mouse type. >> no pun intended. you will be shocked when you use it. it is really is a full size keyboard. >> you took a write down over video conferencing business the company brought for something north of $400 million few years ago. >> that right. >> there is a discussion whether you will hold on to that video conferencing business. >> as i went through all of the different businesses in logitech. and i'm just picking this up in this video conferencing business. it is a fantastic business. very interesting competitive spot. >> is it a core business? >> it is. we just launched a really great new technology there. smart video, that makes it a really easy, easy video conferencing system. so it has an advantage there. a great price point. >> but you've got big competitors there. cisco and others are there. i'm hearing you say you intend to retain this business.
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>> we are evaluating it right now. it is a really interesting business. it has a really good competitive niche in the business. and we are looking hard at what we will do. >> so i do sense that what you are about right now is right sizing the company. >> correct. >> and how do you intend to do that? what will stay and what will go? >> what will go for sure, we have decided we will be about pc peripherals for sure. about mobility peripherals for sure and let go of some of the other businesses. so remote controls. harmony remote controls. security business and other smaller pieces of other businesses. we will let them go. because we will focus on the future which is the growth of the overall computing space. >> so a smaller company but more profritiable and you think that will turn the stock around because the stock had trouble. >> that's right. a smaller more profitable company short term and long-term a smaller more profitable company that growing. >> and sue this very neat little -- what would you call it, a touch pad really. it is beautiful.
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it is nice. and blue tooth and doubles as a mouth, basically. >> absolutely. and it is fantastic. the surface is like dragging your fingers across water. >> very nice. >> can you do the gesture control and everything. >> and happy birthday. >> thank you. i really appreciate it. >> sue? >> fantastic stuff. thanks, guys. let's recap some other big headlines that are driving today's sessions. sprint nextel, seeking to sell 70% of its shares to japan posted higher kwourj quarter revenue. monster worldwide, on-line recruiting company, reporting a quarterly loss as it continues to look for a eye buyer. monster has been hurt by the weak job market in the u.s. and europe as well. via sat is bucking the trend after posting better than expected third quarter results. a provider of mobile satellite network services. internet content delivery company, warning that its revenues would come in below street forecast. this, as it winds down, media contracts. media and entertainment
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businesses account for full 34% of revenues in 2011. coming up, we're going inside one of the top housing markets across america. take a look at this. this is five-bedroom, waterfront property. it is stunning. guess how much it might cost? on this week's edition of the powerhouse, you won't believe what your money can buy. in america today we're running out of a vital resource we need to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone is ready with the know-how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu/knowhow. ♪
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with we reveal five more extreme cash photos on apple and we speak to someone who says what they should be doing about it. also eamon javers with a behind the scenes cloak and dagger showing of director of the cia and have you taken a break from
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facebook or facebook vacation, if you like? and never gone back. we revealed new research that you probably want to know about if you are a facebook investor. all those things coming up on "street signs." back to you on "power lunch." >> thanks, mandy. in today's yahoo! finance question of the day. we ask as housing continues to recover how concerned are you that we may be wentering a housing bubble? 25% say they are very concerned. 25% say somewhat concerned but half of you say you are not concerned. ty? >> we call this powerhouse and every thursday we look at a top 20 housing market across the country. we talked to a realtori doing business, showing homes. this week we go to denver. larry is a broker associated with the kent wood company. larry, welcome, good to have you with us. >> great to be here tyler. let's look at numbers you
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crunched for us for at weekending february 3. 958 listings under contract sales. and you've got some listings for us. how hot is the market, mr. hots? >> well, it is definitely my name sake at the moment. it's hots. it will continue to get hot here in the spring selling season. >> all right. >> our biggest challenge is just not enough homes to sell. >> inventory is tight. which is good for prices and maybe not, you know, maybe not so good for people who are shopping. let's look at listings, beginning with one that i would call a moderately priced but very nice home at $415,000. it is in, let me see, castle pines, north. tell me about it. >> castle pines north is a very popular denver suburb on the south side. very top rated schools. community swim pools and trails that go through the -- that go around three golf courses. so it is not a bad commute either into town. about 35 minutes downtown and 15
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minutes to the denver tech center. this particular home has five bedrooms and three baths. and it backs to expansive open space. so you have a lot of privacy in this home. >> it looks like an updated kitchen. look that very nice interior bathroom. and taxes are just, what are they, $3100 a year. that's -- boy, i got to move to colorado, larry. >> well, our property taxes, we think, are in line, compared to a lot of my clients who move here from out of state. >> let's step up to a nice property at 3535 west warren avenue in denver. it is on a lake, or what? >> is on a lake. and we only have a few lakes in denver. it is not like minnesota, land of 10,000 lakes. we only have 1100 homes on lakes in the denver metro area. so it is a very rare find indeed. riviera lake is the name of it. and our listing agent, steve
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trafers, lives on riviera lake. he can ski on that lake six months a year. just in time to snow ski for the other six months of the year. it offers a very lovely lifestyle. >> this house is actually in denver proper, then? >> it is. and that makes the taxes even more reasonable for its price. >> look that. $2700 are the taxes there or $660,000 home. the one we just showed a moment ago in castle rock or castle pines -- castle pines north. that one had a little higher taxes. let's step up to what we call our powerhouse of the week. and it retails for 1,795,000. i gather cher rery hills is one the most affluent. >> it is one of the top ten nationally for incomes per
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household. it has nationally acclaimed public and private schools. this french country home has five bedrooms, and is on just less than one-half acre. other cherry hills homes are located in gated community and there is even some horse properties on acreage in cherry hills. it has more after rural flavor like connecticut but an easy commute into downtown of 20 minutes. >> 4800 square feet on this one. 10,000 in taxes on this one. and you can see, it really is a beautiful executive home. >> yes. i think it is. i've had this home listed now for three months. we were off the market for the holidays and just came back on. >> where does peyton manning live? around there? >> peyton manning lives in cherry hill. i knew you were going to tell me that. thanks, larry. we appreciate it. >> good to be with us. >> terrific. continued good luck to you. >> sue? >> ty, we pay too much for property taxes. we live in new jersey. what's your best way to
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unlock value in apple's stock in we will tell byou about that. we're back in two minutes time.
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and the nasdaq is down 15 points on the trading day so far. it is power rundown time and joining us is bob pisani and kate kelly. first up, guys, as we told you earlier, green light capitals david einhorn saying that apple has a cash problem. what it do with the cash. and tech giant should distribute high yield preferred stock to shareholders. is he right, kate? if he is not right, what is the best way it unlock apple's value at this point. >> sue, i think he has a lot of points. there is too much cash on apple's balance sheet. they need do something swiftly with that cash. whether or not they need to
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issue the perpetual preferred shares is debatable. there is merit to it. it solves taxation issues with overseas subsidiaries. at the same time, there are other ways to return value to shareholders. they may or may not have a way to do away with preferred shareholder segment which is one piece of what einhorn is debating. so i'm a little up in the air on it. >> here is the problem i've got, sue. i don't know about the preferred but just taking the money and increasing the dividend or buying back stock is not good enough. einhorn said that. i agree with him on that. remember when they said it is about intel and microsoft. increase the dividend? microsoft has 10% dividend that has gone nowhere for ten years. >> very good point. this got us talking in the newsroom about why companies with large share prices like an apple or google perhaps, split
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their stock to attract a smaller investor into the pool. kate? >> i think this is a compelling idea. i think that without w apple for example, if you do one for ten stock split you could end up with $45 stock that is more manageable in some ways than the $450 stock that takes huge ups and downs every time there is news in the market. 10 it is an interesting idea. enables more smaller investors to get involved. if you had a finite amount of money to put in your ira that time of year. on the other hand, not necessarily a quick fix for bigger problems. >> remember when it was popular to split stocks, sue? remember that? >> oh, absolutely. >> back in the 90s. didn't prefer anybody from dropping in the early 2000. i think professionals, guys who run the stocks, have realized retail can be very fickle and institutions can be 5 little bit stickier and i think a lot of that -- >> bob, i got to interrupt you because the boeing 787 on the flight from dallas to everett,
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washington, is approaching everett, washington right now. it left dallas at 9:25 a.m. three and a half hour flight. that plane is ultimately destined to be delivered to china air. they have not taken delivery on that. and i think phil lebeau will join us on it too. are there any conditions that the faa and ntsb put on boeing, phil? >> yes, sue. there were conditions on the ferry flight. we said at the bottom of the screen this is a test flight. this is an test flight. this is a ferry flight. they are repositioning the aircraft from fort worth where it was being painted to the 787 dreamliner facility there in everett, washington. the whole idea is it is now 234 position for the when the day comes they have to make modifications, whenever the modifications may wined up being being, it is now in position to do that. i'm sure the faa is part
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granting the ferry flight waiver, they made very clear you have to monitor batteries, only two pilots from boeing flying it back and that's it. again, it is not a test flight. it was a ferry flight. >> you know, there were conflicting reports earlier as we watched that plane taxi down the runway. now arrived in everett washington from dallas. there were conflicting reports this morning, phil as it whether they were going to try to recreate certain conditions in this flight. that were present in previous flights where there were some battery issues. can you clarify that? >> you know, sue, i'm sure they will to the extent that they can. listen, why try to recreate the conditions if you can. but at the same time, let's be clear here. a test flight and ferry flight are completely different. when have you a test flight, there is so much equipment under the back of a plane, special
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equipment that is looking for certain things. in different test flights, monitor and watch different things within a plane in terms of the diagnostics. so to an extent that they can see how the plane reacted under certain conditions, certainly they took advantage of this flight to do that. but a test flight and ferry flight completely different in terms of what boeing can do in flux. >> all right, phil lebeau, thanks for the clarification. we appreciate it, as always. boeing shares today up a full percent at 76.96 on the trading session. back to update you on the markets when tyler and i continue on "power lunch." you should've seen me today. tdd# 1-800-345-2550 when the spx crossed above its 50-day moving average, tdd# 1-800-345-2550 i saw the trend. tdd# 1-800-345-2550 it looked really strong. tdd# 1-800-345-2550 and i jumped right on it. tdd# 1-800-345-2550 tdd# 1-800-345-2550 since i've switched to charles schwab... tdd# 1-800-345-2550 ...i've been finding opportunities like this tdd# 1-800-345-2550 a lot more easily. tdd# 1-800-345-2550 like today, tdd# 1-800-345-2550 i was using their streetsmart edge trading platform tdd# 1-800-345-2550 and i saw a double bottom form. tdd# 1-800-345-2550 i called one of their trading specialists tdd# 1-800-345-2550 and i bounced a few ideas off of him.
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been to any yard sales lately? maybe you should go. a rare baseball card found in rural maine auctioned for 92,000. it depicts the brooklyn atlantics from 1865. main man who didn't want to be identified found the card inside a photo album he bought with other knickknacks for a hundred dollars. don't you want to know who that guy was who had the yard sale and let that one get away? i once wrote a caption, very
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convincing caption on a book of collectibles, about a card, nelson r. field of the red stockings. nobody could identify him. but you know the problem? 2 t was jack nelson, right field. >> oh, jack, you're too much. once again, well off of our lows, down 55 on the dow. down less than 5 now on the s&p and nasdaq down just a fraction. ty? >> all right, sue, get home before the snow falls. that does it for "power lunch" everybody. thanks for watching. >> have a great afternoon. "street signs" begins now. welcome to "street signs," extreme cash horder addiction. david einhorn eyeing apple's
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money but there are companies who have more than apple's stash. big names down. sales come out. and many are making a huge mistake. we are calling this the french sailor problem. well explain. plus is facebook over? people are tuning o out and we are launching a new segment saying, say what? congratulations marco rubio. you are our first entry. you will find out why. >> we have been tracking these ongoing losses for an even keener reason. the dow hasn't dropped this year, and in fact, hasn't had one since september 28. all of the averages are nonetheless on track for their first losing week of 2013. we have to turn that around. let's get straight down to bob pisani. wasn't draghi from ecb that did us in earlier on?
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>> maybe. you look for excuses. but he was very dovish. mario draghi. inflation expected to fall. that gives him room to be a com dating. that will indicate further weakness into 2013. i think they were looking for something more bullish from him. europe hasn't been as strong as the united states. remember, you heard from mandy. basically side ways since end of january. stocks have been weaker here. vanguard of europe here, that's what you want to look for here, this is the european markets in the last four or five days. so a little bit of divergence going on between europe and united states. elsewhere, if you look at the weak sectors right now, just look at it and show you what is going on. most of the damage is done in the first hour. strange because futures were
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fine. we just went into the open straight down. usually it doesn't happen that way and we are sitting right near highs since about 10:30 eastern time. i want to show you weak sectors, mandy, before i toss is back to you. remember, housing stocks and biotech in the month of january. those are two weak groups. that is profit taking materials and technology as well of course you have a somewhat stronger dollar today that usually impacts materials. back to you. >> as i said yesterday, hit highs, take profits. thank you so much, bob pisani. >> joining us is managing director at web bush securities. all right, peter. nobody is panicking. we are still off to a great beginning to the year. but it does seem, seem, like some of the momentum has come out of stocks the last couple of days. agree or disagree? >> completely agree. we saw the first signs of that when we captured three days where the dow moved three digits in one day. in three successiveay